GST--Detention and Seizure of Goods

Imposition of Penalty on Detention of Goods--Analysis of Practical Implication of Section 129 and Section 125

V.N. Damodar

The learned author seeks to make an analytical study of the issue as to whether in case of minor contravention of section 68 of the CGST Act or rule 138A of the CGST Rules, whether penalty under section 129 should be imposed or general penalty under section 125 should be imposed.

1. Introduction

Section 129 of the Central Goods and Services Tax Act, 2017 (in short "the CGST Act") deals with detention, seizure and release of goods and conveyances in transit.

As per sub-section (1) of section 129, where any person transports any goods or stores any goods while they are in transit in contravention of the provisions of this Act or the rules made thereunder, all such goods and conveyance used as a means of transport for carrying the said goods and documents relating to such goods and conveyance shall be liable to detention or seizure and after detention or seizure, shall be released, -

(a) on payment of penalty equal to two hundred per cent of the tax payable on such goods and, in case of exempted goods, on payment of an amount equal to two per cent of the value of goods or twenty-five thousand rupees, whichever is less, where the owner of the goods comes forward for payment of such penalty;

(b) on payment of penalty equal to fifty per cent of the value of the goods or two hundred per cent of the tax payable on such goods, whichever is higher, and in case of exempted goods, on payment of an amount equal to five per cent of the value of goods or twenty-five thousand rupees, whichever is less, where the owner of the goods does not come forward for payment of such penalty;

(c) upon furnishing a security equivalent to the amount payable under clause (a) or clause (b) in such form and manner as may be prescribed;